Bessette/Pitney’s AMERICAN GOVERNMENT AND POLITICS: DELIBERATION, DEMOCRACY AND CITIZENSHIP reviews the idea of "deliberative democracy." Building on the book, this blog offers insights, analysis, and facts about recent events.

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Sunday, February 9, 2014

Gilded Silicon

Ironically, the very entrepreneurial form that defeated Japan’s bid for global technological dominance is morphing into an American version of the famed keiretsu that have long dominated the Japanese economy. The keiretsu,epitomized by such sprawling groups as Mitsubishi, Sumitomo and even Toyota,spread across a vast field of activities, leveraging their access to finance as a means to expand into an ever-increasing number of fields. The can best be understood, notes veteran Japan-based journalist Karel van Wolferen, as a series of “intertwined hierarchies.”

Increasingly, American technology is dominated by a handful of companies allied to a small but powerful group of investors and serial entrepreneurs. These firms and individuals certainly compete but largely only with other members of their elite club. And while top executives and investors move from one firm to another, the big companies have constrained competition for those below the executive tier with gentleman’s agreements not to recruit each other’s top employees.

At the top of the American keiretsu system stands a remarkably small group whose fortunes depend in part on monetizing invasions of privacy to use the Internet as a vehicle for advertising. These are not warm and cuddly competitors. Both Google and Microsoft have been accused of using anti-competitive practices to keep out rivals, in part by refusing to license technology acquiring of potential competitors.

Facebook just turned 10. The little social media site that could, started by Harvard undergrads as a platform for college classmates to connect, has now expanded into a publicly traded global empire with new features and app updates debuting all the time, giving founder Mark Zuckerberg a net worth of over $3.7 billion.

Though it only recently jumped into the Washington game, Facebook has made a huge splash in the past few years - and it shows no sign of stopping. In 2012, political contributions from Facebook to candidates increased more than eightfold over their 2008 level, fueled in part by the political action committee the company established in 2011 (prior to that, its giving came only from employees). Moreover, while overall spending on lobbying has been steadily declining for years now, Facebook has gone in the opposite direction, ramping up its lobbying expenditures every year since it entered the Beltway in 2009.